Apprise Wealth Management

Inherited IRA Rules: What Non-Spouse Beneficiaries Need to Know

Phil Weiss, CFA®, CPA

Updated July 2026

If you inherited an individual retirement account, or IRA, in 2020 or later, you may still be uncertain which inherited IRA rules apply. That is understandable. After several years of changing guidance, the IRS finalized its regulations in 2024. The final rules apply beginning with required minimum distributions, or RMDs, for 2025.

Most individual non-spouse beneficiaries who are not Eligible Designated Beneficiaries must empty an inherited IRA within 10 years. Whether they must also take annual distributions during that period depends largely on whether the original owner died before or after their required beginning date, the date by which the owner was required to begin taking RMDs.

Inherited IRAs involve tax, financial planning, and estate planning decisions. Some mistakes can trigger an immediate tax bill or create problems that are difficult, and sometimes impossible, to correct.

Inherited IRA rules at a glance:

If the owner died before their required beginning date: Most NEDBs do not have to take annual RMDs during Years 1 through 9, but the account must be empty by the end of Year 10.

If the owner died on or after their required beginning date: Most NEDBs must take annual RMDs during Years 1 through 9 and empty the account by the end of Year 10.

If you inherited a Roth IRA: Most NEDBs do not have annual RMDs during Years 1 through 9, but the inherited Roth IRA generally must still be empty by the end of Year 10.

Different rules may apply to Eligible Designated Beneficiaries, trusts, estates, charities, and other non-individual beneficiaries.

First, determine what type of beneficiary you are

Not every person who inherits an IRA follows the same distribution rules. This blog focuses primarily on individual non-spouse beneficiaries who are classified as Non-Eligible Designated Beneficiaries, or NEDBs. Most children who were age 21 or older when the owner died, along with many other non-spouse beneficiaries, fall into this category and are generally subject to the 10-year rule.

Different rules may apply if the beneficiary is:

For this purpose, “disabled” and “chronically ill” are tax-law classifications with specific definitions and documentation requirements.

These individuals are known as Eligible Designated Beneficiaries, or EDBs. Depending on their beneficiary category, the account terms, and when the owner died, they may qualify for distributions based on life expectancy. Surviving spouses have additional options, including, in some circumstances, treating the IRA as their own.

Trusts, estates, charities, and other non-individual beneficiaries can also follow different rules.

Before applying the inherited IRA rules to your situation, confirm which beneficiary category applies to you.

Common Mistakes to Avoid When You Inherit an IRA

Inheriting an IRA can feel overwhelming. Understanding these rules can help you avoid five common mistakes:

The sections below explain each issue and the decisions that follow. When in doubt, consult a financial planner or tax professional before taking action. Some inherited IRA mistakes are difficult, and occasionally impossible, to correct.

11 Things to Consider Under the Inherited IRA Rules in 2026

The following 11 points focus on an individual who inherited an IRA from someone other than a spouse and is classified as a Non-Eligible Designated Beneficiary, or NEDB. Different rules can apply if you are an Eligible Designated Beneficiary or if a trust, estate, charity, or other entity inherited the account.

1. Establish the inherited IRA correctly.

You generally do not need to make every distribution decision immediately, but you should address the account setup promptly. Notify the custodian of the owner’s death and ask it to establish an inherited IRA for your benefit.

The title may look something like this:

“[Owner’s name], deceased [date of death], IRA FBO [beneficiary’s name].”

Custodians may use different formats, but the account must remain in the deceased owner’s name for your benefit. Do not ask the custodian to transfer the account into an IRA owned in your individual name.

If multiple people inherited the same IRA, determine whether separate inherited IRAs should be established by December 31 of the year following the owner’s death. Accounts established by that deadline generally can be treated separately when applying the beneficiary RMD rules.

2. Determine whether the deceased owner had an unfinished RMD.

If the owner died on or after their required beginning date, calculate the owner’s RMD for the year as though they had lived for the entire year. Subtract any distributions the owner took before death. The beneficiaries must make sure the remaining amount is distributed by December 31.

This can be especially challenging when someone dies late in the year, and the beneficiaries do not yet know how much the owner withdrew. If several beneficiaries share the account, they should coordinate with the custodian. Any beneficiary may take some or all of the remaining year-of-death RMD, but the total requirement must be satisfied. For example, if the remaining RMD is $20,000, it could be divided among the beneficiaries or satisfied by one beneficiary, subject to the custodian’s procedures.

If the deadline has passed, correct the shortfall promptly and consult a tax professional. The excise tax is generally 25% of the shortfall but may be reduced to 10% if the correction and filing requirements are met. A special automatic waiver may apply to certain year-of-death RMDs corrected within the required period.

3. You cannot contribute to an inherited IRA.

A non-spouse beneficiary cannot make new contributions to an inherited IRA or combine it with an IRA they own personally. Inherited IRAs received from different original owners must also remain separate. You may be able to combine inherited IRAs received from the same owner when they have the same beneficiary, are the same type of IRA, and are subject to the same distribution rules.

4. You can transfer the inherited IRA to another custodian.

You do not have to keep the inherited IRA with the original custodian. If you prefer another custodian, you can request a direct trustee-to-trustee transfer to a properly titled inherited IRA.

Do not have the funds paid to you personally. The 60-day rollover rule does not apply to a non-spouse inherited IRA.

5. You cannot convert an inherited traditional IRA to a Roth IRA.

A non-spouse beneficiary cannot convert an inherited traditional IRA into an inherited Roth IRA. Instead, the taxable portion of each distribution is generally included in income in the year it is received.

Planning tip: A taxable inherited IRA distribution can increase your adjusted gross income. Coordinate the timing with any Roth conversions, IRA contributions, charitable gifts, or other tax-planning strategies you are considering.

6. Determine which version of the 10-year rule applies.

Under the inherited IRA rules, most NEDBs who inherited an IRA after 2019 must empty the account by December 31 of the 10th year following the owner’s death. For example, if the owner died in 2022, the account generally must be empty by December 31, 2032.

Whether annual RMDs apply before that deadline depends on when the original owner died:

If the owner died before their required beginning date: You generally do not have to take annual RMDs during Years 1 through 9. You may choose when to take distributions, but the account must be empty by the end of Year 10.

If the owner died on or after their required beginning date: You generally must take annual RMDs during Years 1 through 9 and still empty the account by the end of Year 10. The annual calculation is generally based on the longer of your life expectancy or the deceased owner’s remaining life expectancy.

An RMD is only the minimum. Depending on your tax situation, it may make sense to distribute more than the required amount in some years rather than leave a large balance for Year 10.

IRAs inherited before 2020 follow different rules.

7. You may be able to make a qualified charitable distribution (QCD).

If you have reached age 70½ and are charitably inclined, you may be able to make a qualified charitable distribution, or QCD, from an inherited IRA. The custodian must transfer the funds directly to an eligible charity.

A qualifying QCD is excluded from your income to the extent the distribution would otherwise be taxable, and it can count toward your inherited IRA RMD for the year. Donor-advised funds, supporting organizations, and most private foundations generally are not eligible recipients. The annual inflation-adjusted QCD limit is $111,000 per eligible individual for 2026.

8. The 10% early distribution penalty does not apply to a non-spouse beneficiary.

Distributions made to a non-spouse beneficiary after the IRA owner’s death are not subject to the 10% early-distribution penalty, even if the beneficiary is younger than age 59½. The taxable portion of a traditional inherited IRA distribution is generally taxed as ordinary income.

Review the deceased owner’s tax records for Form 8606 or other evidence of nondeductible IRA contributions. Your share of any remaining after-tax basis generally carries into the inherited IRA and can make part of your distributions tax-free.

9. Inherited Roth IRAs follow a different version of the 10-year rule.

For RMD purposes, a Roth IRA owner is treated as having died before their required beginning date. As a result, most NEDBs do not have to take annual distributions from an inherited Roth IRA during Years 1 through 9. The account generally must still be empty by December 31 of Year 10.

Roth IRA distributions are generally tax-free once the original owner’s five-year holding period has been satisfied. If that period has not been completed, some distributed earnings may be taxable.

Eligible Designated Beneficiaries may qualify for different distribution rules.

10. Name a successor beneficiary.

Review the inherited IRA’s beneficiary designation and name the person or people who should receive the account if you die before it has been fully distributed. Otherwise, the custodial agreement’s default provisions will control, and the account could become payable to your estate.

If an NEDB dies before the inherited IRA is emptied, the successor beneficiary generally must complete the original beneficiary’s remaining 10-year period and continue any annual RMDs that applied. The deadline does not ordinarily restart merely because the account passes to a successor. Different rules can apply when the original beneficiary was an Eligible Designated Beneficiary.

11. See how the rules work in practice.

Assume Vicki inherited a traditional IRA from her father, who died in 2022 after his required beginning date. Vicki was 55 in 2022 and turned 56 in 2023, the year following her father’s death.

Because her father died after his required beginning date, Vicki must take annual RMDs and empty the account by December 31, 2032. For this example, assume Vicki’s life expectancy produces the applicable factor.

According to the IRS Single Life Expectancy Table, the factor for a 56-year-old is 30.6. That factor is reduced by one for each subsequent year:

If the inherited IRA was worth $276,000 on December 31, 2025, Vicki’s 2026 RMD would be $10,000:

$276,000 ÷ 27.6 = $10,000

That is the minimum she must take for 2026, not necessarily the amount she should take. Vicki should consider her current and expected future tax brackets, retirement date, other income, charitable plans, and anticipated cash needs when deciding whether to withdraw more.

You can verify the calculation using the IRS Single Life Expectancy Table or a reputable inherited IRA RMD calculator such as Schwab’s.

Frequently Asked Questions About Inherited IRA Rules

1. How do the inherited IRA rules apply to the owner’s child who is under age 21?

A child of the account owner who had not reached age 21 when the owner died is generally an Eligible Designated Beneficiary.

If the child is taking distributions under the life-expectancy method, annual RMDs generally begin in the year after the owner’s death. When the child reaches age 21, the 10-year rule begins for the remaining balance. Annual life-expectancy distributions generally continue during that period, and the account must be emptied by December 31 of the year containing the 10th anniversary of the child’s 21st birthday.

If the owner died before their required beginning date, the child may instead be able to elect a 10-year period measured from the owner’s death, subject to the IRA’s terms and the applicable election deadline. Because that choice can materially change the distribution schedule, professional guidance may be appropriate.

2. What if I did not take an inherited IRA RMD from 2021 through 2024?

The IRS provided relief for certain annual inherited-account RMDs that were not taken during the regulatory transition. The relief did not cover every missed RMD or distribution deadline.

Beginning with 2025 RMDs, beneficiaries should follow the final regulations. If you missed a distribution, identify which rule applied and consult a tax professional rather than assuming the earlier relief protects you.

3. What if several people inherited the same IRA?

The beneficiaries should coordinate any unfinished year-of-death RMD and determine whether separate inherited IRAs should be established. Establishing separate accounts by December 31 of the year following the owner’s death can allow the accounts to be treated separately when applying the beneficiary RMD rules.

4. I just inherited an IRA. What should I do first?

Do not make an irreversible move until you understand the account and the applicable deadlines. Start by:

Our Inherited IRA Checklist can help you organize these initial decisions.

What should an inherited IRA beneficiary do now?

The inherited IRA rules create deadlines, but they do not create one distribution strategy that works for everyone. Start by identifying your beneficiary classification, determining whether annual RMDs apply, and confirming the final date by which the account must be emptied.

Then look beyond the minimum requirements. Consider how inherited IRA distributions will interact with your current and future tax brackets, retirement timing, Medicare income-related premiums, taxation of Social Security benefits, charitable giving, state taxes, and expected cash needs. Taking only the minimum each year may concentrate a substantial amount of taxable income in Year 10, when a more deliberate distribution schedule might produce a better result.

A thoughtful multi-year distribution plan can help you comply with the rules while making the inherited assets work more effectively for your life.

Not sure where to begin? Download our Inherited IRA Checklist to help you organize the information you need, identify important deadlines, and prepare for a conversation with your financial or tax professional.

If you have inherited an IRA and want help understanding the rules and creating a thoughtful distribution strategy, you can schedule a complimentary call with us.

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This article is for general educational purposes and does not provide individualized tax, legal, or investment advice. Inherited IRA rules may depend on the account terms, beneficiary designation, date of death, and the circumstances of the beneficiary. Consult the appropriate tax and legal professionals before acting.

Primary sources: IIRS Publication 590-B, the final required minimum distribution regulations issued in Treasury Decision 10001, and IRS Notice 2024-35 regarding transitional relief for certain missed RMDs.

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